---------------------------
Annual Report June 30, 1999
---------------------------
OPPENHEIMER
Gold & Special
Minerals Fund
[GRAPHIC OMITTED]
[LOGO]
OppenheimerFunds(SM)
THE RIGHT WAY TO INVEST
<PAGE>
Contents
3 President's Letter
5 An Interview with Your Fund's Managers
10 Fund Performance
15 Financial Statements
32 Independent Auditors' Report
33 Federal Income Tax Information
34 Officers and Trustees
36 Information and Services
Report highlights
- --------------------------------------------------------------------------------
o Plans to sell off a large part of the world's gold reserves continued to exert
exceptional downward price pressure on the gold market.
o The Fund is a stock fund, not a commodity fund. We evaluate each holding as we
would a typical business that brings in cash flow and earnings.
o Investments in special minerals provided a major boost in performance. In the
last year, magnesium, platinum and palladium have all added value.
Avg Annual Total Returns
For the 1-Year Period
Ended 6/30/99
Class A
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------
12.03% 5.59%
- ----------------------------
Class B
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------
11.15% 6.15%
- ----------------------------
Class C
Without With
Sales Chg.(1) Sales Chg.(2)
- ----------------------------
11.12% 10.12%
- ----------------------------
Total returns include changes in share price and reinvestment of dividends and
capital gains distributions in a hypothetical investment for the periods shown.
In reviewing performance and rankings, please remember that past performance
does not guarantee future results. Investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Because the stock
market can be volatile, the Fund's performance may be subject to substantial
short-term changes. For updates on the Fund's performance, please contact your
financial advisor, call us at 1-800-525-7048 or visit our website,
www.oppenheimerfunds.com.
(1). Includes changes in net asset value per share without deducting any sales
charges.
(2). Class A returns include the current maximum initial sales charge of 5.75%.
Class B returns include the applicable contingent deferred sales charge of 5%.
Class C returns include the contingent deferred sales charge of 1%. Class B and
C shares are subject to an annual 0.75% asset-based sales charge. An explanation
of the different performance calculations is in the Fund's prospectus.
2 Oppenheimer Gold & Special Minerals Fund
<PAGE>
[PHOTO]
Bridget A. Macaskill
President
Oppenheimer
Gold & Special
Minerals Fund
Dear shareholder,
- --------------------------------------------------------------------------------
According to popular belief, the last six months have been particularly
favorable for the financial markets.
The truth of the matter is that it's been a long, uphill struggle for the
diversified investor. That's because the stock market's dramatic rise reflects
the performance of the Dow Jones Industrial Average, which has been fueled by
only a small number of large-capitalization growth stocks and technology
companies. In the bond market this year, while many corporate and foreign bonds
have provided relatively attractive returns, the first quarter of 1999 was the
worst quarter in history for U.S. Treasury securities.(1)
Recently, though, signs of change have been emerging that confirm the
importance of a well-diversified portfolio. While investors focusing on
large-cap growth and technology stocks may have achieved superior short-term
returns, they may have also dramatically increased their exposure to potential
risks. If recent economic and market trends persist, previously out-of-favor
stocks may continue to rise.
Specifically, U.S. economic growth has continued to surpass most analysts'
expectations and the breadth of the market's positive performance has begun to
widen. This has raised concerns that inflationary pressures may re-emerge.
Looking outside of the United States, many foreign economies also appear to be
on the mend. The impact of these changes, as it applies to your fund, is
discussed more fully inside by your portfolio manager.
(over, please)
(1). Foreign investing entails higher expenses and risks, such as foreign
currency fluctuations, economic and political instability, and differences in
accounting standards.
3 Oppenheimer Gold & Special Minerals Fund
<PAGE>
You may also have wondered about the impact of the Year 2000 problem on your
investments. While we cannot predict the final outcome, we are pleased that many
companies and governments appear to be making progress toward avoiding a major
disruption. For our part, OppenheimerFunds is in the advanced stages of our Y2K
project, and we have successfully participated in industry-wide tests.
Meanwhile, we intend to maintain the disciplined investment approach that
has been helping Oppenheimer funds shareholders for more than 40 years as they
pursue their financial goals. Our longstanding experience has taught us that
while investment fads come and go, prudent diversification remains key to
successful investing. In fact, it is an essential part of what makes
OppenheimerFunds The Right Way to Invest.
Sincerely,
/s/ Bridget A. Macaskill
Bridget A. Macaskill
July 22, 1999
4 Oppenheimer Gold & Special Minerals Fund
<PAGE>
[PHOTO]
Portfolio Management
Team (l to r)
Frank Jennings
Shanquan Li
An interview with your Fund's managers
- --------------------------------------------------------------------------------
How did the Fund perform during the fiscal year that ended June 30, 1999?
The overall gold market, in spite of occasional rallies, was characterized by
exceptional downward price pressure during this past year. The decline in the
price of gold was due to ongoing concerns set off when a number of central banks
and the International Monetary Fund announced a plan to sell off a large part of
their gold reserves.
Nevertheless, the Fund outperformed its benchmark, the Lipper Gold Fund
Index, which generated a -3.85% return for the one-year period that ended June
30, 1999.(1) Oppenheimer Gold & Special Minerals Fund's Class A shares provided
an average annual total return, without sales charges, of 12.03% for the same
period.(2)
(1). The Lipper Gold Fund Index includes funds that focus on gold-oriented
investments such as gold mines, gold-oriented finance houses, or gold coins,
without considering sales charges.
(2). Includes changes in net asset value per share without deducting any sales
charges. Such performance would have been lower if sales charges were taken into
account.
5 Oppenheimer Gold & Special Minerals Fund
<PAGE>
"Gold is generally considered to be the single asset with value that is less
directly affected by any government or political action."
An interview with your Fund's managers
- --------------------------------------------------------------------------------
What factors had the greatest impact on the gold market during this period?
The primary reason that central banks hold gold, in the view of the World Gold
Council, is that gold is believed to be the single asset with value that is less
directly affected by any government or political action. Although history has
proven the value of gold during periods of turbulence, for the past decade
worldwide financial markets have been relatively stable. In this environment,
the traditional use of gold as currency "insurance" is being questioned by a
growing list of government bodies. As a result, the U.K. Treasury, Swiss
National Bank and the International Monetary Fund are considering selling off
what amounts to nine months global output, over a five-year period.
How did you manage the Fund in light of this situation?
What sets this Fund apart is our basic strategy: Oppenheimer Gold & Special
Minerals Fund is a stock fund, not a commodity fund. We protect the interests of
our shareholders by following a proven investment discipline, judging each
holding as a typical business that brings in cash flow and earnings. We focus on
senior producers who have economies of scale, large, high-grade reserves, solid
resources, and low production costs. In addition, we diversify, not only among
sectors, but also among metals special minerals and between different countries.
6 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Finally, we seek out companies that are diversified themselves. For instance, a
company may produce gold, but may also have reserves in zinc and any number of
other metals. Investing in companies that are gold-related, but also produce
other metals, provides extra leverage during difficult markets. When the price
of gold is low, some of their other metals may be doing well.
What factors led to the Fund's good performance, relative to its peers?
Our investments in special minerals provided a major boost in performance. In
the last year, magnesium, platinum and palladium have all added value to the
portfolio. Platinum is produced in only three large areas: South Africa, Russia
and the United States. Stillwater Mining Co., a key producer of platinum and
palladium in North America, was the Fund's largest holding. The demand for
platinum has been very strong, not only on the consumer side for jewelry, but on
the industrial side. For example, platinum's current uses include the
manufacture of computers, hard drives and certain electronic devices. It has
shown equal promise for use in environmentally mandated catalytic converters,
but the price is prohibitive and worldwide resources are very limited. However,
palladium, a mineral that is chemically similar to platinum, but less expensive,
has proven equally effective for use in catalytic converters. Due to large sales
to automobile manufacturers, our palladium producers are also performing well.
7 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Avg Annual Total Returns
For the Periods Ended 6/30/993
Class A
1 year 5 year 10 year
- ------------------------------------
5.59% -6.58% -1.35%
- ------------------------------------
Class B
Since
1 year Inception
- ------------------------------------
6.15% -7.23%
- ------------------------------------
Class C
Since
1 year Inception
- ------------------------------------
10.12% -6.41%
- ------------------------------------
An interview with your Fund's managers
- --------------------------------------------------------------------------------
What is your outlook for the future?
The concerns about central banks selling their gold reserves are slightly
mitigated by their indecision about the best way to go about it. Putting too
much gold on the market at one time will further depress prices and lower
potential gains. Nevertheless, that possibility, and the concerns it creates, is
likely to put a cap on the price of gold. We continue to believe the gold mining
industry will consolidate further, which may ultimately prove advantageous for
the survivors--as well as for shareholders. Given this scenario and our focus on
well-capitalized senior producers, we believe that the risk/reward factor should
continue to be more favorable in gold stocks. Our strategy is to continue with
our current ratio of approximately 80% of the Fund's assets allocated to gold
and precious minerals.(4)
(3). Total returns include changes in share price and reinvestment of dividends
and capital gains distributions in a hypothetical investment for the periods
shown. Class A returns include the current maximum initial sales charge of
5.75%. Class A shares were first publicly offered on 7/19/83. The Fund's maximum
sales charge for Class A shares was higher prior to 4/1/91, so actual
performance may have been lower. Class B returns include the applicable
contingent deferred sales charge of 5% (1-year) and 3% (since inception on
11/1/95). Class C returns for the one-year result include the contingent
deferred sales charge of 1%. Class C shares have an inception date of 11/1/95.
Class B and C shares are subject to an annual 0.75% asset-based sales charge. An
explanation of the different performance calculations is in the Fund's
prospectus.
(4). The Fund's portfolio is subject to change.
(5). Portfolio is subject to change. Percentages are as of June 30, 1999, and
are based on total market value of investments.
8 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Industry Breakdown(5)
[The following table was originally a pie chart in the printed material.]
Gold and Precious Minerals 78.4%
Metals 17.5
Cash Equivalents 3.1
Chemicals 1.0
At the same time we will actively monitor the central bank situation and, if
indicated, rebalance the allocations. This kind of active management and
disciplined investment approach are what make Oppenheimer Gold & Special
Minerals Fund part of The Right Way to Invest.
Top 10 Stock Holdings(5)
- --------------------------------------------------------------------------------
Stillwater Mining Co. 9.5%
- --------------------------------------------------------------------------------
Barrick Gold Corp. 7.5
- --------------------------------------------------------------------------------
Placer Dome Inc. 6.2
- --------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 6.0
- --------------------------------------------------------------------------------
Euro-Nevada Mining Corp. 5.2
- --------------------------------------------------------------------------------
Newmont Mining Corp. 4.9
- --------------------------------------------------------------------------------
Anglogold Ltd. 3.6
- --------------------------------------------------------------------------------
Anglo American Platinum Corp. Ltd. 3.6
- --------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 3.4
- --------------------------------------------------------------------------------
Homestake Mining Co. 3.2
- --------------------------------------------------------------------------------
9 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
How Has the Fund Performed? Below is a discussion, by the Manager, of the Fund's
performance during its fiscal year ended June 30, 1999, followed by a graphical
comparison of the Fund's performance to an appropriate broad-based market index.
o Management's Discussion of Performance. For the fiscal year that ended
June 30, 1999, the Fund's performance was negatively affected by continuing
downward price pressure in the overall gold market. At the same time, the Fund
performed relatively well compared to competitors, as indicated by the Lipper
Gold Fund Index. The weak performance of the gold market was due to low levels
of U.S. inflation, a strong U.S. dollar relative to other currencies and the
sale of significant amounts of gold by many central banks. The Fund benefited
from diversification, specifically investments in special minerals, such as
magnesium, platinum and palladium. The Fund's portfolio holdings, allocation and
management strategies are subject to change.
o Comparing the Fund's Performance to the Market. The graphs that follow
show the performance of a hypothetical $10,000 investment in Class A, Class B
and Class C shares of the Fund held until June 30, 1999. In the case of Class A
shares, performance is measured over a ten-year period. In the case of Class B
and Class C shares, performance is measured from inception of the classes on
November 1, 1995. The Fund's performance reflects the deduction of the maximum
initial sales charge on Class A shares and the applicable contingent deferred
sales charge for Class B and Class C shares. The graphs assume that all
dividends and capital gains distributions were reinvested in additional shares.
10 Oppenheimer Gold & Special Minerals Fund
<PAGE>
The Fund's performance is compared to the performance of the Morgan Stanley
Capital International (MSCI) World Index, an unmanaged index of issuers listed
on the stock exchanges of 20 foreign countries and the United States. The Index
is widely recognized as a measure of global stock market performance. Index
performance reflects the reinvestment of dividends but does not consider the
effect of capital gains or transaction costs, and none of the data in the graphs
that follow shows the effect of taxes. The Fund's performance reflects the
effects of Fund business and operating expenses. While index comparisons may be
useful to provide a benchmark for the Fund's performance, it must be noted that
the Fund's investments are not limited to the investments in the index. The
Fund's investments are concentrated in one group of industries while the Morgan
Stanley World Index includes companies from different industries with different
degrees of volatility and returns.
11 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Fund performance
- --------------------------------------------------------------------------------
Class A Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Gold & Special Minerals Fund (Class A) and Morgan Stanley Capital
International (MSCI) World Index
[GRAPH OMITTED]
Average Annual Total Return of Class A Shares of the Fund at 6/30/99(1)
1 year 5.59% 5 year -6.58% 10 year -1.35%
Class B Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Gold & Special Minerals Fund (Class B) and Morgan Stanley Capital
International (MSCI) World Index
[GRAPH OMITTED]
Average Annual Total Return of Class B Shares of the Fund at 6/30/99(2)
1 year 6.15% Life -7.23%
12 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Class C Shares
Comparison of Change in Value of $10,000 Hypothetical Investments in:
Oppenheimer Gold & Special Minerals Fund (Class C) and Morgan Stanley Capital
International (MSCI) World Index
[GRAPH OMITTED]
Average Annual Total Return of Class C Shares of the Fund at 6/30/99(3)
1 year 10.12% Life -6.41%
The returns and the ending account values in the graphs show change in share
value and include reinvestment of all dividends and capital gains distributions.
The performance information for the MSCI World Index in the graphs begins on
6/30/89 for Class A and 10/31/95 for both Class B and Class C.
(1). The inception of the Fund (Class A shares) was 7/19/83. The average annual
total returns are shown net of the applicable 5.75% maximum initial sales
charge.
(2). Class B shares of the Fund were first publicly offered on 11/1/95. The
average annual total returns are shown net of the applicable 5% and 3%
contingent deferred sales charges, for the one-year period and the life of the
class. The ending account value in the graph is net of the applicable 3%
contingent deferred sales charge.
(3). Class C shares of the Fund were first publicly offered on 11/1/95. The
average annual total returns are shown net of the applicable 1% contingent
deferred sales charge for the one-year period. Past performance is not
predictive of future performance. Graphs are not drawn to the same scale.
13 Oppenheimer Gold & Special Minerals Fund
<PAGE>
Financials
- --------------------------------------------------------------------------------
14 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments June 30, 1999
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Common Stocks--98.1%
- --------------------------------------------------------------------------------
Basic Materials--98.1%
- --------------------------------------------------------------------------------
Chemicals--1.0%
AMCOL International Corp. 33,100 $ 475,812
- --------------------------------------------------------------------------------
Engelhard Corp. 10,000 226,250
- --------------------------------------------------------------------------------
IMC Global, Inc. 15,000 264,375
-----------
966,437
- --------------------------------------------------------------------------------
Gold & Precious Minerals--79.1%
- --------------------------------------------------------------------------------
Gold--8.8%
Euro-Nevada Mining Corp. 442,000 5,256,046
- --------------------------------------------------------------------------------
Franco-Nevada Mining Corp. Ltd. 223,000 3,450,361
-----------
8,706,407
- --------------------------------------------------------------------------------
Gold Mining: Australia--6.8%
Acacia Resources Ltd. 1,130,000 1,308,950
- --------------------------------------------------------------------------------
Delta Gold NL 1,000,000 1,423,131
- --------------------------------------------------------------------------------
Lihir Gold Ltd.(1) 1,000,000 754,591
- --------------------------------------------------------------------------------
Newcrest Mining Ltd.(1) 700,000 1,571,667
- --------------------------------------------------------------------------------
Ranger Minerals NL 300,000 466,655
- --------------------------------------------------------------------------------
Sons of Gwalia Ltd. 453,019 1,192,555
- --------------------------------------------------------------------------------
Zimbabwe Platinum Mines Ltd.(1) 200,000 45,011
-----------
6,762,560
- --------------------------------------------------------------------------------
Gold Mining: Canada--20.4%
Agnico-Eagle Mines Ltd. 80,000 491,876
- --------------------------------------------------------------------------------
Barrick Gold Corp. 393,860 7,612,047
- --------------------------------------------------------------------------------
Cambior, Inc. 270,000 866,526
- --------------------------------------------------------------------------------
Francisco Gold Corp.(1) 50,000 287,153
- --------------------------------------------------------------------------------
Goldcorp, Inc., Cl. A(1) 298,900 1,464,159
- --------------------------------------------------------------------------------
Kinross Gold Corp.(1) 790,000 1,329,078
- --------------------------------------------------------------------------------
Placer Dome, Inc. 530,000 6,232,155
- --------------------------------------------------------------------------------
Teck Corp., Cl. B 219,800 1,886,060
-----------
20,169,054
- --------------------------------------------------------------------------------
Gold Related Investment--2.8%
Normandy Mining Ltd. 4,186,946 2,788,058
- --------------------------------------------------------------------------------
Gold Mining: South Africa--12.5%
Anglogold Ltd. 61,500 2,649,843
- --------------------------------------------------------------------------------
Anglogold Ltd., Sponsored ADR 48,000 1,032,000
- --------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., Sponsored GDR 346,120 2,401,207
- --------------------------------------------------------------------------------
Avgold Ltd.(1) 400,000 218,086
- --------------------------------------------------------------------------------
Durban Roodepoort Deep Ltd.(1) 180,000 310,226
15 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Investments (Continued)
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- --------------------------------------------------------------------------------
Gold Mining: South Africa (continued)
Gold Fields Ltd. 642,147 $ 2,202,807
- --------------------------------------------------------------------------------
Harmony Gold Mining Co. 300,000 1,411,924
- --------------------------------------------------------------------------------
IAMGOLD, International African Mining Gold Corp.(1) 70,000 141,887
- --------------------------------------------------------------------------------
Meridian Gold, Inc.(1) 200,000 925,646
- --------------------------------------------------------------------------------
Randfontein Estates Ltd. 190,000 327,460
- --------------------------------------------------------------------------------
Western Areas Ltd.(1) 245,000 771,421
-----------
12,392,507
- --------------------------------------------------------------------------------
Gold Mining: United States--8.3%
Homestake Mining Co. 400,000 3,275,000
- --------------------------------------------------------------------------------
Newmont Mining Corp. 247,871 4,926,436
-----------
8,201,436
- --------------------------------------------------------------------------------
Platinum Mining--19.5%
Anglo American Platinum Corp. Ltd. 73,600 1,717,324
- --------------------------------------------------------------------------------
Anglo American Platinum Corp. Ltd., ADR 83,718 1,953,409
- --------------------------------------------------------------------------------
Impala Platinum Holdings Ltd. 240,000 6,037,466
- --------------------------------------------------------------------------------
Stillwater Mining Co.(1) 293,000 9,577,437
-----------
19,285,636
-----------
78,305,658
- --------------------------------------------------------------------------------
Metals--18.0%
- --------------------------------------------------------------------------------
Copper--1.8%
Freeport-McMoRan Copper & Gold, Inc., Cl. A 105,000 1,758,750
- --------------------------------------------------------------------------------
Metals: Diversified--9.0%
Brush Wellman, Inc. 104,800 1,899,500
- --------------------------------------------------------------------------------
Cia Vale do Rio Doce, Preference A 50,000 992,696
- --------------------------------------------------------------------------------
Cominco Ltd. 29,200 491,254
- --------------------------------------------------------------------------------
Dia Met Minerals Ltd., Cl. B(1) 50,000 861,459
- --------------------------------------------------------------------------------
Gencor Ltd. 600,000 1,650,559
- --------------------------------------------------------------------------------
Lonmin plc 220,000 2,046,037
- --------------------------------------------------------------------------------
Rio Tinto plc 56,000 938,781
-----------
8,880,286
- --------------------------------------------------------------------------------
Metals: Miscellaneous--4.7%
Caemi Mineracao e Metalurgia SA, Preference 11,179,000 372,014
- --------------------------------------------------------------------------------
Cameco Corp. 60,000 1,252,662
- --------------------------------------------------------------------------------
Groupo Mexico SA 50,000 212,221
- --------------------------------------------------------------------------------
Iluka Resources Ltd. 600,000 1,297,102
- --------------------------------------------------------------------------------
SouthernEra Resources Ltd.(1) 150,000 496,606
- --------------------------------------------------------------------------------
Union Miniere SA 25,000 1,031,273
-----------
4,661,878
16 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Market Value
Shares See Note 1
- -------------------------------------------------------------------------------
Nickel--2.5%
Falconbridge Ltd. 150,000 $ 2,113,107
- -------------------------------------------------------------------------------
Inco Ltd. 20,000 360,000
-----------
2,473,107
-----------
17,774,021
-----------
Total Common Stocks (Cost $92,069,102) 97,046,116
===============================================================================
Preferred Stocks--1.3%
- -------------------------------------------------------------------------------
Ashanti Goldfields Co. Ltd., A Shares(2) 88,888 97,777
- -------------------------------------------------------------------------------
Battle Mountain Gold Co., $3.25 Cum. Cv., Non-Vtg 33,900 1,154,718
-----------
Total Preferred Stocks (Cost $1,866,040) 1,252,495
Face
Amount
===============================================================================
Repurchase Agreements--3.1%
- -------------------------------------------------------------------------------
Repurchase agreement with First Chicago Capital
Markets, 4.80%, dated 6/30/99, to be repurchased
at $3,100,413 on 7/1/99, collateralized by U.S.
Treasury Nts., 5.50%-8%, 11/30/99-7/15/06, with
a value of $2,617,024, U.S. Treasury Bonds,
6%-9.25%, 2/15/16-2/15/26, with a value of
$548,026 (Cost $3,100,000) $3,100,000 3,100,000
- -------------------------------------------------------------------------------
Total Investments, at Value (Cost $97,035,142) 102.5% 101,398,611
- ------------------------------------------------------------------------------
Liabilities in Excess of Other Assets (2.5) (2,456,072)
----- -------------
Net Assets 100.0% $ 98,942,539
===== =============
Distribution of investments representing geographic diversification, as a
percentage of total investments at value, is as follows:
Geographic Diversification Market Value Percent
- -------------------------------------------------------------------------------
Canada $ 35,518,082 35.0%
- -------------------------------------------------------------------------------
United States 26,658,280 26.3
- -------------------------------------------------------------------------------
South Africa 22,683,731 22.4
- --------------------------------------------------------------------------------
Australia 10,945,496 10.8
- --------------------------------------------------------------------------------
Great Britain 2,984,818 2.9
- --------------------------------------------------------------------------------
Brazil 1,364,710 1.4
- --------------------------------------------------------------------------------
Belgium 1,031,273 1.0
- --------------------------------------------------------------------------------
Mexico 212,221 0.2
------------ -----
Total $101,398,611 100.0%
============ =====
(1). Non-income-producing security.
(2). Identifies issues considered to be illiquid or restricted--See Note 6 of
Notes to Financial Statements.
See accompanying Notes to Financial Statements.
17 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
==============================================================================================
<S> <C>
Assets
Investments, at value (cost $97,035,142)--see accompanying statement $ 101,398,611
- ----------------------------------------------------------------------------------------------
Cash 42,222
- ----------------------------------------------------------------------------------------------
Receivables and other assets:
Shares of beneficial interest sold 804,500
Interest and dividends 21,620
Other 10,260
-------------
Total assets 102,277,213
==============================================================================================
Liabilities
Unrealized depreciation on foreign currency exchange contracts--Note 5 7,068
- ----------------------------------------------------------------------------------------------
Payables and other liabilities:
Investments purchased 2,673,558
Shares of beneficial interest redeemed 362,181
Trustees' compensation--Note 1 101,754
Shareholder reports 66,091
Distribution and service plan fees 52,658
Transfer and shareholder servicing agent fees 31,991
Custodian fees 17,970
Other 21,403
-------------
Total liabilities 3,334,674
==============================================================================================
Net Assets $ 98,942,539
=============
==============================================================================================
Composition of Net Assets
Paid-in capital $ 121,281,699
- ----------------------------------------------------------------------------------------------
Undistributed net investment income 237,984
- ----------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (26,939,487)
- ----------------------------------------------------------------------------------------------
Net unrealized appreciation on investments and translation of
assets and liabilities denominated in foreign currencies 4,362,343
-------------
Net assets $ 98,942,539
=============
</TABLE>
18 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
=========================================================================================
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$78,514,231 and 7,973,858 shares of beneficial interest outstanding) $ 9.85
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price) $10.45
- -----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $14,528,472 and
1,502,954 shares of beneficial interest outstanding) $ 9.67
- -----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $5,899,836 and
608,686 shares of beneficial interest outstanding) 9.69
</TABLE>
See accompanying Notes to Financial Statements.
19 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statement of Operations For the Year Ended June 30, 1999
- --------------------------------------------------------------------------------
================================================================================
Investment Income
Dividends (net of foreign withholding taxes of $93,071) $ 1,928,899
- -------------------------------------------------------------------------------
Interest 213,735
------------
Total income 2,142,634
================================================================================
Expenses
Management fees--Note 4 724,222
- -------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees--Note 4 369,032
- -------------------------------------------------------------------------------
Distribution and service plan fees--Note 4:
Class A 166,371
Class B 123,590
Class C 52,722
- --------------------------------------------------------------------------------
Shareholder reports 124,705
- --------------------------------------------------------------------------------
Custodian fees and expenses 59,659
- --------------------------------------------------------------------------------
Trustees' compensation--Note 1 30,205
- --------------------------------------------------------------------------------
Legal, auditing and other professional fees 24,608
- --------------------------------------------------------------------------------
Insurance expenses 4,675
- --------------------------------------------------------------------------------
Other 20,348
------------
Total expenses 1,700,137
Less expenses paid indirectly--Note 1 (3,823)
------------
Net expenses 1,696,314
================================================================================
Net Investment Income 446,320
================================================================================
Realized and Unrealized Gain (Loss)
Net realized gain (loss) on:
Investments 566,427
Foreign currency transactions (2,105,188)
------------
Net realized loss (1,538,761)
- -------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation on:
Investments 12,068,559
Translation of assets and liabilities
denominated in foreign currencies 1,151,535
------------
Net change 13,220,094
------------
Net realized and unrealized gain 11,681,333
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations $ 12,127,653
============
See accompanying Notes to Financial Statements.
20 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30,
1999 1998
===============================================================================================
<S> <C> <C>
Operations
Net investment income $ 446,320 $ 266,771
- -----------------------------------------------------------------------------------------------
Net realized loss (1,538,761) (15,533,246)
- -----------------------------------------------------------------------------------------------
Net change in unrealized appreciation or depreciation 13,220,094 (27,090,596)
------------ -------------
Net increase (decrease) in net assets resulting from operations 12,127,653 (42,357,071)
===============================================================================================
Dividends to Shareholders
Dividends from net investment income:
Class A (152,625) (360,008)
===============================================================================================
Beneficial Interest Transactions
Net increase (decrease) in net assets resulting
from beneficial interest transactions--Note 2:
Class A (9,546,621) (10,099,835)
Class B 2,373,711 5,712,711
Class C (269,738) 2,776,982
===============================================================================================
Net Assets
Total increase (decrease) 4,532,380 (44,327,221)
- -----------------------------------------------------------------------------------------------
Beginning of period 94,410,159 138,737,380
------------ -------------
End of period [including undistributed
(overdistributed) net investment
income of $237,984 and $(97,629), respectively] $ 98,942,539 $ 94,410,159
============ =============
</TABLE>
See accompanying Notes to Financial Statements.
21 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
--------------------------------------------------------------------------
Year Ended June 30,
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 8.81 $ 12.68 $ 14.15 $ 13.48 $ 13.28
- ------------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) .06 .04 .04 .04 .06
Net realized and unrealized gain (loss) 1.00 (3.87) (1.48) .69 .21
--------- --------- --------- --------- ---------
Total income (loss) from investment operations 1.06 (3.83) (1.44) .73 .27
- ------------------------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income (.02) (.04) (.03) (.06) (.07)
--------- --------- --------- --------- ---------
Total dividends and distributions to shareholders (.02) (.04) (.03) (.06) (.07)
- ------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.85 $ 8.81 $ 12.68 $ 14.15 $ 13.48
========= ========= ========= ========= =========
==============================================================================================================================
Total Return, at Net Asset Value(1) 12.03% (30.23)% (10.20)% 5.44% 2.03%
==============================================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 78,514 $ 78,458 $ 126,086 $ 161,769 $ 171,721
- ------------------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 78,932 $ 102,501 $ 149,564 $ 171,427 $ 178,579
- ------------------------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) 0.62% 0.32% 0.28% 0.25% 0.45%
Expenses 1.62% 1.43%(3) 1.34%(3) 1.38%(3) 1.36%(3)
- ------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 45% 65% 21% 38% 36%
</TABLE>
(1). Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2). Annualized for periods less than one full year.
(3). Expense ratio reflects the effect of expenses paid indirectly by the Fund.
(4). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $42,057,535 and $47,430,508, respectively.
22 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
---------------------------------------------------------
Year Ended June 30,
1999 1998 1997 1996(5)
=============================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 8.70 $ 12.56 $ 14.11 $ 12.33
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) -- (.01) (.04) (.01)
Net realized and unrealized gain (loss) .97 (3.85) (1.51) 1.79
--------- --------- --------- ---------
Total income (loss) from investment operations .97 (3.86) (1.55) 1.78
- -------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- -- -- --
--------- --------- --------- ---------
Total dividends and distributions to shareholders -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.67 $ 8.70 $ 12.56 $ 14.11
========= ========= ========= =========
=============================================================================================================
Total Return, at Net Asset Value(1) 11.15% (30.73)% (10.99)% 14.25%
=============================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 14,528 $ 10,681 $ 8,716 $ 4,882
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 12,369 $ 10,150 $ 7,361 $ 2,588
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.22)% (0.41)% (0.48)% (0.25)%
Expenses 2.41% 2.21%(3) 2.16%(3) 2.22%(3)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 45% 65% 21% 38%
</TABLE>
(1). Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2). Annualized for periods less than one full year.
(3). Expense ratio reflects the effect of expenses paid indirectly by the Fund.
(4). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $42,057,535 and $47,430,508, respectively.
(5). For the period from November 1, 1995 (inception of offering) to June 30,
1996.
23 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
---------------------------------------------------------
Year Ended June 30,
1999 1998 1997 1996(5)
=============================================================================================================
<S> <C> <C> <C> <C>
Per Share Operating Data
Net asset value, beginning of period $ 8.72 $ 12.59 $ 14.13 $ 12.33
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (.02) (.01) (.02) (.01)
Net realized and unrealized gain (loss) .99 (3.86) (1.52) 1.81
--------- --------- --------- ---------
Total income (loss) from investment operations .97 (3.87) (1.54) 1.80
- -------------------------------------------------------------------------------------------------------------
Dividends and distributions to shareholders:
Dividends from net investment income -- -- -- --
--------- --------- --------- ---------
Total dividends and distributions to shareholders -- -- -- --
- -------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 9.69 $ 8.72 $ 12.59 $ 14.13
========= ========= ========= =========
=============================================================================================================
Total Return, at Net Asset Value(1) 11.12% (30.74)% (10.90)% 14.41%
=============================================================================================================
Ratios/Supplemental Data
Net assets, end of period (in thousands) $ 5,900 $ 5,271 $ 3,935 $ 1,390
- -------------------------------------------------------------------------------------------------------------
Average net assets (in thousands) $ 5,276 $ 4,215 $ 2,672 $ 840
- -------------------------------------------------------------------------------------------------------------
Ratios to average net assets:(2)
Net investment income (loss) (0.22)% (0.41)% (0.45)% (0.26)%
Expenses 2.40% 2.20%(3) 2.18%(3) 2.19%(3)
- -------------------------------------------------------------------------------------------------------------
Portfolio turnover rate(4) 45% 65% 21% 38%
</TABLE>
(1). Assumes a $1,000 hypothetical initial investment on the business day before
the first day of the fiscal period (or inception of offering), with all
dividends and distributions reinvested in additional shares on the reinvestment
date, and redemption at the net asset value calculated on the last business day
of the fiscal period. Sales charges are not reflected in the total returns.
Total returns are not annualized for periods of less than one full year.
(2). Annualized for periods less than one full year.
(3). Expense ratio reflects the effect of expenses paid indirectly by the Fund.
(4). The lesser of purchases or sales of portfolio securities for a period,
divided by the monthly average of the market value of portfolio securities owned
during the period. Securities with a maturity or expiration date at the time of
acquisition of one year or less are excluded from the calculation. Purchases and
sales of investment securities (excluding short-term securities) for the period
ended June 30, 1999, were $42,057,535 and $47,430,508, respectively.
(5). For the period from November 1, 1995 (inception of offering) to June 30,
1996.
See accompanying Notes to Financial Statements.
24 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies
Oppenheimer Gold & Special Minerals Fund (the Fund) is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's investment objective is to seek
capital appreciation. The Fund's investment advisor is OppenheimerFunds, Inc.
(the Manager). The Fund offers Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge, on investments up to $1 million.
Class B and Class C shares may be subject to a contingent deferred sales charge
(CDSC). All classes of shares have identical rights to earnings, assets and
voting privileges, except that each class has its own expenses directly
attributable to that class and exclusive voting rights with respect to matters
affecting that class. Classes A, B and C have separate distribution and/or
service plans. Class B shares will automatically convert to Class A shares six
years after the date of purchase. The following is a summary of significant
accounting policies consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Portfolio securities are valued at the close of the New
York Stock Exchange on each trading day. Listed and unlisted securities for
which such information is regularly reported are valued at the last sale price
of the day or, in the absence of sales, at values based on the closing bid or
the last sale price on the prior trading day. Long-term and short-term
"non-money market" debt securities are valued by a portfolio pricing service
approved by the Board of Trustees. Such securities which cannot be valued by an
approved portfolio pricing service are valued using dealer-supplied valuations
provided the Manager is satisfied that the firm rendering the quotes is reliable
and that the quotes reflect current market value, or are valued under
consistently applied procedures established by the Board of Trustees to
determine fair value in good faith. Short-term "money market type" debt
securities having a remaining maturity of 60 days or less are valued at cost (or
last determined market value) adjusted for amortization to maturity of any
premium or discount. Foreign currency exchange contracts are valued based on the
closing prices of the foreign currency contract rates in the London foreign
exchange markets on a daily basis as provided by a reliable bank or dealer.
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the closing rates of exchange. Amounts related
to the purchase and sale of foreign securities and investment income are
translated at the rates of exchange prevailing on the respective dates of such
transactions.
The effect of changes in foreign currency exchange rates on
investments is separately identified from the fluctuations arising from changes
in market values of securities held and reported with all other foreign currency
gains and losses in the Fund's Statement of Operations.
25 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
1. Significant Accounting Policies (continued)
Repurchase Agreements. The Fund requires the custodian to take possession, to
have legally segregated in the Federal Reserve Book Entry System or to have
segregated within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is required
to be at least 102% of the resale price at the time of purchase. If the seller
of the agreement defaults and the value of the collateral declines, or if the
seller enters an insolvency proceeding, realization of the value of the
collateral by the Fund may be delayed or limited.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income, including any net realized gain on
investments not offset by loss carryovers, to shareholders. Therefore, no
federal income or excise tax provision is required. As of June 30, 1999, the
Fund had available for federal income tax purposes an unused capital loss
carryover of approximately $25,900,000, which expires between 2000 and 2007.
- --------------------------------------------------------------------------------
Trustees' Compensation. The Fund has adopted a nonfunded retirement plan for the
Fund's independent Trustees. Benefits are based on years of service and fees
paid to each trustee during the years of service. During the year ended June 30,
1999, a provision of $6,072 was made for the Fund's projected benefit
obligations and payments of $4,954 were made to retired trustees, resulting in
an accumulated liability of $98,747 as of June 30, 1999.
The Board of Trustees has adopted a deferred compensation plan for
independent Trustees that enables Trustees to elect to defer receipt of all or a
portion of annual compensation they are entitled to receive from the Fund. Under
the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the Trustees in shares of one or more
Oppenheimer funds selected by the Trustee. The amount paid to the Trustee under
the plan will be determined based upon the performance of the selected funds.
Deferral of Trustees' fees under the plan will not affect the net assets of the
Fund, and will not materially affect the Fund's assets, liabilities or net
income per share.
26 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
Distributions to Shareholders. Distributions to shareholders, which are
determined in accordance with income tax regulations, are recorded on the
ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of distributions made
during the year from net investment income or net realized gains may differ from
its ultimate characterization for federal income tax purposes. Also, due to
timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the fiscal year in which the income or realized gain
was recorded by the Fund.
The Fund adjusts the classification of distributions to shareholders
to reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended June 30, 1999, amounts have been reclassified to reflect an increase
in paid-in capital of $528,483, increase in undistributed net investment income
of $41,918, and an increase in accumulated net realized loss on investments of
$570,401.
- --------------------------------------------------------------------------------
Expense Offset Arrangements. Expenses paid indirectly represent a reduction of
custodian fees for earnings on cash balances maintained by the Fund.
- --------------------------------------------------------------------------------
Other. Investment transactions are accounted for as of trade date and dividend
income is recorded on the ex-dividend date. Foreign dividend income is often
recorded on the payable date. Realized gains and losses on investments and
unrealized appreciation and depreciation are determined on an identified cost
basis, which is the same basis used for federal income tax purposes.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
27 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest. Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
Year Ended June 30, 1999 Year Ended June 30, 1998
-------------------------- -----------------------------
Shares Amount Shares Amount
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A:
Sold 11,245,976 $ 104,670,021 12,853,959 $ 135,829,366
Dividends reinvested 15,567 140,416 36,061 325,275
Redeemed (12,193,450) (114,357,058) (13,929,468) (146,254,476)
---------- ------------- ---------- -------------
Net decrease (931,907) $ (9,546,621) (1,039,448) $ (10,099,835)
========== ============= ========== =============
- ------------------------------------------------------------------------------------------
Class B:
Sold 2,242,622 $ 20,604,492 1,457,504 $ 15,191,579
Redeemed (1,967,421) (18,230,781) (923,519) (9,478,868)
---------- ------------- ---------- -------------
Net increase 275,201 $ 2,373,711 533,985 $ 5,712,711
========== ============= ========== =============
- ------------------------------------------------------------------------------------------
Class C:
Sold 2,502,629 $ 22,956,234 2,406,210 $ 24,524,520
Redeemed (2,498,625) (23,225,972) (2,114,188) (21,747,538)
---------- ------------- ---------- -------------
Net increase (decrease) 4,004 $ (269,738) 292,022 $ 2,776,982
========== ============= ========== =============
</TABLE>
================================================================================
3. Unrealized Gains and Losses on Securities
As of June 30, 1999, net unrealized appreciation on investments of $4,363,469
was composed of gross appreciation of $23,606,156, and gross depreciation of
$19,242,687.
================================================================================
4. Management Fees and Other Transactions
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 0.75% of
the first $200 million of aggregate net assets, 0.72% of the next $200 million,
0.69% of the next $200 million, 0.66% of the next $200 million and 0.60% of net
assets in excess of $800 million. The Fund's management fee for the year ended
June 30, 1999, was 0.75% of the average annual net assets for each class of
shares.
================================================================================
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
is the transfer and shareholder servicing agent for the Fund and for other
registered investment companies. OFS's total costs of providing such services
are allocated ratably to these companies.
================================================================================
Distribution and Service Plan Fees. Under its General Distributor's Agreement
with the Manager, the Distributor acts as the Fund's principal underwriter in
the continuous public offering of the different classes of shares of the Fund.
28 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.
<TABLE>
<CAPTION>
Aggregate Class A
Front-End Front-End Commissions on Commissions on Commissions on
Sales Charges Sales Charges Class A Shares Class B Shares Class C Shares
on Class A Retained by Advanced by Advanced by Advanced by
Year Ended Shares Distributor Distributor(1) Distributor(1) Distributor(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
June 30, 1999 $229,926 $59,183 $1,759 $235,796 $27,551
</TABLE>
(1). The Distributor advances commission payments to dealers for certain sales
of Class A shares and for sales of Class B and Class C shares from its own
resources at the time of sale.
<TABLE>
<CAPTION>
Class A Class B Class C
Contingent Deferred Contingent Deferred Contingent Deferred
Sales Charges Sales Charges Sales Charges
Retained by Retained by Retained by
Year Ended Distributor Distributor Distributor
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
June 30, 1999 $ -- $75,650 $9,444
</TABLE>
The Fund has adopted a Service Plan for Class A shares and
Distribution and Service Plans for Class B and Class C shares under Rule 12b-1
of the Investment Company Act. Under those plans the Fund pays the Distributor
for all or a portion of its costs incurred in connection with the distribution
and/or servicing of the shares of the particular class.
- --------------------------------------------------------------------------------
Class A Service Plan Fees. Under the Class A service plan, the Distributor
currently uses the fees it receives from the Fund to pay brokers, dealers and
other financial institutions. The Class A service plan permits reimbursements to
the Distributor at a rate of up to 0.25% of average annual net assets of Class A
shares purchased on or after April 1, 1988. The rate is 0.15% for shares
purchased before that date. The Distributor makes payments to plan recipients
quarterly at an annual rate not to exceed 0.25% of the average annual net assets
consisting of Class A shares of the Fund. For the fiscal year ended June 30,
1999, payments under the Class A Plan totaled $166,371, all of which was paid by
the Distributor to recipients. That included $4,543 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor incurs
with respect to Class A shares in any fiscal year cannot be recovered in
subsequent years.
- --------------------------------------------------------------------------------
Class B and Class C Distribution and Service Plan Fees. Under each plan, service
fees and distribution fees are computed on the average of the net asset value of
shares in the respective class, determined as of the close of each regular
business day during the period. The Class B and Class C plans provide for the
Distributor to be compensated at a flat rate, whether the Distributor's
distribution expenses are more or less than the amounts paid by the Fund under
the plans during the period for which the fee is paid.
29 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
================================================================================
4. Management Fees and Other Transactions (continued)
The Distributor retains the asset-based sales charge on Class B shares. The
Distributor retains the asset-based sales charge on Class C shares during the
first year the shares are outstanding. The asset-based sales charges on Class B
and Class C shares allow investors to buy shares without a front-end sales
charge while allowing the Distributor to compensate dealers that sell those
shares.
The Distributor's actual expenses in selling Class B and Class
C shares may be more than the payments it receives from the contingent deferred
sales charges collected on redeemed shares and from the Fund under the plans. If
either the Class B or the Class C plan is terminated by the Fund, the Board of
Trustees may allow the Fund to continue payments of the asset-based sales charge
to the Distributor for distributing shares before the plan was terminated. The
plans allow for the carry-forward of distribution expenses, to be recovered from
asset-based sales charges in subsequent fiscal periods.
Distribution fees paid to the Distributor for the year ended June 30, 1999 were
as follows:
<TABLE>
<CAPTION>
Distributor's Distributor's
Aggregate Unreimbursed
Unreimbursed Expenses as
Total Payments Amount Retained Expenses % of Net Assets
Class Under Plan By Distributor Under Plan of Class
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class B Plan $123,590 $105,092 $675,663 4.65%
- -----------------------------------------------------------------------------------------------------
Class C Plan $ 52,722 $ 34,960 $104,675 1.77%
</TABLE>
================================================================================
5. Foreign Currency Contracts
A foreign currency exchange contract is a commitment to purchase or sell a
foreign currency at a future date, at a negotiated rate. The Fund may enter into
foreign currency exchange contracts for operational purposes and to seek to
protect against adverse exchange rate fluctuations. Risks to the Fund include
the potential inability of the counterparty to meet the terms of the contract.
The net U.S. dollar value of foreign currency underlying all
contractual commitments held by the Fund and the resulting unrealized
appreciation or depreciation are determined using foreign currency exchange
rates as provided by a reliable bank, dealer or pricing service. Unrealized
appreciation and depreciation on foreign currency contracts are reported in the
Statement of Assets and Liabilities.
The Fund may realize a gain or loss upon the closing or settlement
of the foreign currency transactions. Realized gains and losses are reported
with all other foreign currency gains and losses in the Statement of Operations.
Securities denominated in foreign currency to cover net exposure on
outstanding foreign currency contracts are noted in the Statement of Investments
where applicable.
30 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
As of June 30, 1999, the Fund had outstanding foreign currency contracts as
follows:
<TABLE>
<CAPTION>
Contract
Expiration Amounts Valuation as of Unrealized
Contract Description Date (000s) June 30, 1999 Depreciation
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts to Purchase
- ---------------------
British Pound Sterling (GBP) 7/1/99 570GBP $898,507 $7,068
</TABLE>
================================================================================
6. Illiquid or Restricted Securities
As of June 30, 1999, investments in securities included issues that are illiquid
or restricted. Restricted securities are often purchased in private placement
transactions, are not registered under the Securities Act of 1933, may have
contractual restrictions on resale, and are valued under methods approved by the
Board of Trustees as reflecting fair value. A security may also be considered
illiquid if it lacks a readily available market or if its valuation has not
changed for a certain period of time. The Fund intends to invest no more than
10% of its net assets (determined at the time of purchase and reviewed
periodically) in illiquid or restricted securities. Certain restricted
securities, eligible for resale to qualified institutional investors, are not
subject to that limitation. The aggregate value of illiquid or restricted
securities subject to this limitation as of June 30, 1999, was $97,777, which
represents 0.10% of the Fund's net assets.
================================================================================
7. Bank Borrowings
The Fund may borrow from a bank for temporary or emergency purposes including,
without limitation, funding of shareholder redemptions provided asset coverage
for borrowings exceeds 300%. The Fund has entered into an agreement which
enables it to participate with other Oppenheimer funds in an unsecured line of
credit with a bank, which permits borrowings up to $400 million, collectively.
Interest is charged to each fund, based on its borrowings, at a rate equal to
the Federal Funds Rate plus 0.35%. Borrowings are payable 30 days after such
loan is executed. The Fund also pays a commitment fee equal to its pro rata
share of the average unutilized amount of the credit facility at a rate of
0.0575% per annum.
The Fund had no borrowings outstanding during the year ended June
30, 1999.
31 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
- --------------------------------------------------------------------------------
================================================================================
The Board of Trustees and Shareholders of
Oppenheimer Gold & Special Minerals Fund:
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of Oppenheimer Gold & Special Minerals Fund as of
June 30, 1999, and the related statement of operations for the year then ended,
the statements of changes in net assets for each of the years in the two-year
period then ended and the financial highlights for each of the years in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of June 30, 1999, by correspondence with the custodian and brokers; and
where confirmations were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Oppenheimer Gold & Special Minerals Fund as of June 30, 1999, the
results of its operations for the year then ended, the changes in its net assets
for each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
KPMG LLP
Denver, Colorado
July 22, 1999
32 Oppenheimer Gold & Special Minerals Fund
<PAGE>
- --------------------------------------------------------------------------------
Federal Income Tax Information (Concluded)
- --------------------------------------------------------------------------------
================================================================================
In early 2000 shareholders will receive information regarding all dividends and
distributions paid to them by the Fund during calendar year 1999. Regulations of
the U.S. Treasury Department require the Fund to report this information to the
Internal Revenue Service.
Dividends of $0.0182 per share were paid to Class A shareholders, on
December 4, 1998. Dividends paid by the Fund during the fiscal year ended June
30, 1999, which are not designated as capital gain distributions should be
multiplied by 35.80% to arrive at the net amount eligible for the corporate
dividend-received deduction.
The foregoing information is presented to assist shareholders in
reporting distributions received from the Fund to the Internal Revenue Service.
Because of the complexity of the federal regulations which may affect your
individual tax return and the many variations in state and local tax
regulations, we recommend that you consult your tax advisor for specific
guidance.
33 Oppenheimer Gold & Special Minerals Fund
<PAGE>
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Oppenheimer Gold & Special Minerals Fund
- --------------------------------------------------------------------------------
================================================================================
Officers and Trustees Leon Levy, Chairman of the Board of Trustees
Donald W. Spiro, Vice Chairman of the Board
of Trustees
Bridget A. Macaskill, Trustee and President
Robert G. Galli, Trustee
Benjamin Lipstein, Trustee
Elizabeth B. Moynihan, Trustee
Kenneth A. Randall, Trustee
Edward V. Regan, Trustee
Russell S. Reynolds, Jr., Trustee
Pauline Trigere, Trustee
Clayton K. Yeutter, Trustee
Frank Jennings, Vice President
Shanquan Li, Vice President
Andrew J. Donohue, Secretary
Brian W. Wixted, Treasurer
Robert G. Zack, Assistant Secretary
Robert J. Bishop, Assistant Treasurer
Scott T. Farrar, Assistant Treasurer
================================================================================
Investment Advisor OppenheimerFunds, Inc.
================================================================================
Distributor OppenheimerFunds Distributor, Inc.
================================================================================
Transfer and Shareholder OppenheimerFunds Services
Servicing Agent
================================================================================
Custodian of The Bank of New York
Portfolio Securities
================================================================================
Independent Auditors KPMG LLP
This is a copy of a report to shareholders of
Oppenheimer Gold & Special Minerals Fund. This
report must be preceded or accompanied by a
Prospectus of Oppenheimer Gold & Special Minerals
Fund. For material information concerning the
Fund, see the Prospectus.
Shares of Oppenheimer funds are not deposits or
obligations of any bank, are not guaranteed by any
bank, are not insured by the FDIC or any other
agency, and involve investment risks, including
the possible loss of the principal amount
invested.
34 Oppenheimer Gold & Special Minerals Fund
<PAGE>
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OppenheimerFunds Family
- --------------------------------------------------------------------------------
<TABLE>
===========================================================================================
<S> <C> <C>
Real Asset Funds
- -------------------------------------------------------------------------------------------
Real Asset Fund Gold & Special Minerals Fund
===========================================================================================
Global Stock Funds
- -------------------------------------------------------------------------------------------
Developing Markets Fund International Growth Fund Global Growth & Income Fund
International Small Global Fund Europe Fund
Company Fund Quest Global Value Fund
===========================================================================================
Stock Funds
- -------------------------------------------------------------------------------------------
Enterprise Fund MidCap Fund Growth Fund
Discovery Fund Capital Appreciation Fund Large Cap Growth Fund
Quest Small Cap Value Fund Quest Capital Value Fund Disciplined Value Fund
Quest Value Fund
===========================================================================================
Stock & Bond Funds
- -------------------------------------------------------------------------------------------
Main Street Growth & Total Return Fund Multiple Strategies Fund
Income Fund(1) Quest Balanced Disciplined Allocation Fund
Quest Opportunity Value Fund Convertible Securities Fund
Value Fund Capital Income Fund(2)
===========================================================================================
Taxable Bond Funds
- -------------------------------------------------------------------------------------------
International Bond Fund Champion Income Fund U.S. Government Trust
World Bond Fund Strategic Income Fund Limited-Term Government Fund
High Yield Fund Bond Fund
===========================================================================================
Municipal Bond Funds
- -------------------------------------------------------------------------------------------
California Municipal Fund(3) Pennsylvania Municipal Fund(3) Rochester Division:
Florida Municipal Fund(3) Municipal Bond Fund Rochester Fund Municipals
New Jersey Municipal Fund(3) Insured Municipal Fund Limited Term New York
New York Municipal Fund(3) Intermediate Municipal Fund Municipal Fund
===========================================================================================
Money Market Funds(4)
- -------------------------------------------------------------------------------------------
Money Market Fund Cash Reserves
</TABLE>
(1). On 12/22/98, the Fund's name was changed from "Oppenheimer Main Street
Income & Growth Fund."
(2). On 4/1/99, the Fund's name was changed from "Oppenheimer Equity Income
Fund."
(3). Available only to investors in certain states.
(4). An investment in money market funds is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although these funds may seek to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in these funds. Oppenheimer
funds are distributed by OppenheimerFunds Distributor, Inc., Two World Trade
Center, New York, NY 10048-0203.
(C) Copyright 1999 OppenheimerFunds, Inc. All rights reserved.
35 Oppenheimer Gold & Special Minerals Fund
<PAGE>
------------------------
Information and Services
------------------------
As an Oppenheimer fund shareholder, you can benefit
from special services designed to make investing
simple. Whether it's automatic investment plans,
timely market updates, or immediate account access,
you can count on us whenever you need assistance.
So call us today, or visit our website--we're here
to help.
Internet
24-hr access to account information and transactions
-----------------------------------------------------
www.oppenheimerfunds.com
-----------------------------------------------------
General Information
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
-----------------------------------------------------
1-800-525-7048
-----------------------------------------------------
Telephone Transactions
Mon-Fri 8:30am-9pm ET, Sat 10am-4pm ET
-----------------------------------------------------
1-800-852-8457
-----------------------------------------------------
PhoneLink
24-hr automated information
and automated transactions
-----------------------------------------------------
1-800-533-3310
-----------------------------------------------------
Telecommunication Device for the Deaf (TDD)
Mon-Fri 8:30am-6pm ET
-----------------------------------------------------
1-800-843-4461
-----------------------------------------------------
OppenheimerFunds Information Hotline
24 hours a day, timely and insightful messages on
the economy and issues that affect your investments
-----------------------------------------------------
1-800-835-3104
-----------------------------------------------------
Transfer and Shareholder Servicing Agent
OppenheimerFunds Services,
P.O. Box 5270, Denver, CO 80217-5270
[LOGO]
OppenheimerFunds(SM)
Distributor, Inc.
